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Books on Armenia
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Update No: 317 - (30/05/07)
Election Results
The Armenians have just held a vital general election. The establishment-side
naturally won.
The Central Election Commission said on May 13th that five parties have been
elected to parliament. According to election results, the Republican Party of
Prime Minister Serzh Sarkisyan received 33.8 per cent of the vote, Prosperous
Armenia gained 15.1 percent and Dashnaktsutyun received 13.1 per cent;
opposition parties Orinats Yerkir and Heritage got 7 per cent and 6 per cent,
respectively.
More than 2 million voters cast their ballots in the May 12 legislative polls,
in which 21 parties and one coalition were competing for 131 seats.
The EU Gives Armenian Leaders a Boost After Disputed Election Win
The European Union has joined Western election observers in praising the conduct
of the parliamentary elections, which were controversially won by political
allies of President Robert Kocharian and Prime Minister Sarkisian. Analysts and
civil society activists say that the development will give the Armenian leaders
more ammunition to dismiss allegations of vote rigging made by their demoralized
opponents, local media, and civic groups.
The May 12th elections were judged largely democratic by some 400 observers
mostly deployed by the Organization for Security and Cooperation in Europe (OSCE)
and its Warsaw-based Office for Democratic Institutions and Human Rights (ODIHR).
The OSCE-led monitoring mission also comprised parliamentarians from the
European Union (EU) and the Council of Europe. In a preliminary report released
in Yerevan on May 13th, the mission described the vote as a significant
improvement over previous Armenian elections tainted by serious fraud.
The EU welcomed the observers' findings. Germany, which currently holds the
bloc's rotating presidency, said in a statement that the elections were "on
the whole, conducted fairly, freely and largely in accordance with the
international commitments which Armenia had entered into." In a separate
statement, the EU's foreign policy chief, Javier Solana, congratulated "the
people of Armenia on the improvements in the conduct of the parliamentary
elections."
Both Germany and Solana indicated that Armenia will now be able to forge closer
links with the EU under the European Neighbourhood Policy (ENP) framework. EU
officials had for months been warning that a recently negotiated set of related
initiatives could be put on hold in the event of fresh electoral fraud.
"This is good news for EU-Armenia relations, in particular as they were the
first elections after Armenia and the EU agreed last year on a wide-reaching
Action Plan," Solana said.
The US more cautious
The United States was more cautious in praising the Armenian authorities'
handling of the election. "Our judgment so far is that this election was an
improvement toward international standards," read a statement issued by the
US embassy in Yerevan on May 15th. The statement noted that long-term OSCE
observers will continue to analyze the official vote results and might still
detect more serious irregularities. "Part of the election process is a
careful consideration of all issues raised in connection with the election,
including several serious allegations of fraud or intimidation which may have
affected the outcome of some of the races," the embassy said.
Even so, the US reaction was markedly different from Washington's strong
criticism of the last Armenian parliamentary and presidential elections in 2003.
Armenian observers believe Yerevan is now well placed to receive the first major
instalment of $236 million in additional US economic assistance from the
Millennium Challenge Account (MCA) programme.
General approval by the West
"Armenia's leaders have never enjoyed such positive post-election
treatment by the international community before," said Tevan Poghosian,
director of the International Centre for Human Development, a Yerevan-based
private think-tank. "Assuming that the OSCE's final election report will
mirror their preliminary findings, Armenia's image abroad will improve
considerably," agreed Levon Zurabian, an independent political scientist.
"The authorities will be able to act with more confidence both in the
international arena and at home."
Indeed, Western criticisms of the past Armenian elections gave the Armenian
opposition a significant argument to challenge the legitimacy of Kocharian's
almost decade-long rule. The OSCE's latest election verdict will enable
Kocharian and his heir apparent, Prime Minister Sarkisian, to claim the moral
high ground with the opposition over election results giving three
pro-government parties overwhelming control of Armenia's new parliament.
Sarkisian's Republican Party of Armenia (RPA), the official election winner,
alone will control at least 65 seats in the 131-member National Assembly.
Another 40 other seats will be held by two other parties loyal to President
Kocharian, Prosperous Armenia and the Armenian Revolutionary Federation.
Legislative elections were widely seen as the rehearsal for next year's
presidential vote, in which Prime Minister Sarkisian is expected to run. Despite
the vote's positive assessment by the West, few Armenian analysts and civil
society representatives consider it democratic. "There seem to have been no
serious incidents in polling stations during both voting and counting of
ballots, which is undoubtedly a positive phenomenon," the Yerevan daily
Aravot said in an editorial. "But even to say that the elections moved a
little closer to European standards would be a mockery of those standards."
At a May 14th press conference, civil society leaders echoed that frustration.
"If this is an international standard, we can honestly say we don't need
these international standards," commented Boris Navashardian, president of
the Yerevan Press Club. "The election is not election day only," added
Larisa Minasyan, executive director of the Open Society Institute Assistance
Foundation - Armenia. "We're talking about the whole process." [Both
the Open Society Institute Assistance Foundation - Armenia and EurasiaNet.org
operate under the auspices of the Open Society Institute].
Virtually all major opposition parties and media critical of the government
claim that the outcome of the poll was essentially decided by massive vote
buying by the RPA and Prosperous Armenia. Throughout voting day there were
numerous reports of busloads of presumably bribed voters transported to polling
stations in Yerevan and other parts of the country. Boris Frlec, head of the
ODIHR mission, said his observers also witnessed the busing.
"Our observers have reported a number of cases where vote buying on
election day could be indicated, but very difficult to prove," Frlec told
journalists on May 13th. "There were groups of people who were waiting in
lines, there were groups of people seen with some money and so on. But we could
include in our report only things that were seen and actually proven."
In the months preceding the vote, the Armenian press had reported on the
widespread collection of voters' passport data by local government officials and
RPA and Prosperous Armenia activists. Representatives of the two parties also
reportedly visited or telephoned households across the country to ascertain for
whom they planned to vote.
Some opposition leaders now say that was aimed at clarifying the names of
hundreds of thousands of Armenians who live and work abroad but remain listed in
voter registries. They allege that the authorities handed out a comparable
number of fake passports to bribed voters who also cast ballots in place of the
absent citizens.
"We have grounds to assert that there were mobile voting groups of people,
and each member of those groups had about 10 passports bearing their pictures
but [printed with] the names of other people," Nikol Pashinian, a leader of
the radical Impeachment bloc, charged at a May 13th opposition rally in Yerevan.
In response, the police promptly laughed off the allegations, questioning the
opposition member's sanity. Pashinian has, in turn, called for a selective
verification of official documents which voters had to sign before casting
ballots.
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CREDIT RATINGS
Fitch revises Armenia's outlook to positive
Fitch Ratings has revised the outlook on Armenia's Foreign and Local Currency
Issuer Default Ratings to Positive from Stable, and affirmed the ratings at BB-
(BB minus), the ratings agency said in a press release on May 2. The agency has
also affirmed the Country Ceiling at BB and the Short-term Foreign Currency
rating at B, the release said, New Europe reported.
The Positive Outlook reflects expectations that disciplined macroeconomic
policies and structural reforms will continue, underpinning sustainable economic
growth and a declining public and external debt burden. However, the policy
authorities face significant challenges in sustaining strong and balanced
economic growth against the backdrop of strong upward pressures on the exchange
rate, rapid expansion of private credit and construction activity, while also
anchoring inflation expectations under the recently introduced direct inflation
targeting regime. In addition, Armenia faces parliamentary elections in 2007 and
a race for the presidency in 2008. While Fitch does not expect material changes
in the country's broad economic and foreign policies to arise from the elections
and a new administration, it could potentially complicate macroeconomic policy
management.
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ECONOMIC COOPERATION
Russia, Armenia discuss economic cooperation
Armenian President Robert Kocharian received a delegation headed by Russian
Deputy Prime Minister Sergey Ivanov.
During a meeting, both sides focused on growing economic relations between the
two nations, Interfax News Agency quoted the Armenian presidential press office
as saying.
Ivanov, who was Russia's defence minister until recently and viewed as one of
Russian President Vladimir Putin's likely successors, arrived in Yerevan just a
week after Serzh Sarkisian's appointment as Armenia's prime minister. The trip
was construed by local commentators as a further sign that Moscow supports his
apparent plans to succeed President Robert Kocharian next year. Ivanov recalled
that he shared a good personal and professional relationship with Sarkisian.
"Therefore, this visit, which is the first in our new civilian capacity,
does not create any problems," he said. "On the contrary, the
relationship which we developed in the past few years is very useful and allows
us to discuss many issues in a straightforward and frank manner." On his
recent visit to Yerevan, Russian Foreign Minister Sergey Lavrov effectively
confirmed Russian media speculation that the widely anticipated handover of
power from President Robert Kocharian to Sarkisian suits the Kremlin. "The
official position of Russia coincides with the unofficial position of
Russia," Lavrov said. Ivannov discussed economic issues with Kocharian and
Sarkisian. According to the Armenian president's office, Ivanov and Kocharian
praised growing bilateral trade and Russian economic presence in Armenia. Both
agreed that an Armenian-Russian partnership enlarged Russian capital presence
and speeded up trade turnover growth in Armenia. Sarkisian stressed the fact
that the volume of Russian-Armenian trade almost doubled last year.
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FOREIGN LOANS
EBRD plans to increase its loan portfolio by 67% in 2007
The European Bank for Reconstruction and Development (EBRD) is planning to
increase its loan portfolio in Armenia by at least 66.6 per cent to 100 million
euro in 2007 from 60 million euro in 2006, Michael Weinstein, head of the EBRD
Yerevan office, told Interfax News Agency reported.
The portfolio will be increased mainly through business loans, since the bank is
continuing to concentrate its activity on financing the private sector of the
country's economy, he said. The EBRD is also planning this year to take part in
the capital of another two to three Armenian enterprises and in at least one
Armenian bank, Weinstein said. The EBRD is currently taking part in the capital
of five Armenian enterprises and in Armeconombank. The EBRD has provided Armenia
with around 120 million Euro to implement more than 40 programmes since 1992.
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INDUSTRIAL PRODUCTION
Industrial production increases 4.3% in Q1
Industrial production in Armenia grew 4.3 per cent year-on-year to 152.366
billion dram in the first quarter of 2007, the Armenian National Statistics
Service told Interfax News Agency.
Armenian extraction enterprises produced 23.459 billion dram of products in
January-March 2007, up 7.4 per cent from the first quarter of 2006.
Manufacturing enterprises increased production 1.9 per cent to 92.609 billion
dram in the quarter. The production and distribution of water, gas and
electricity increased 10.2 per cent to 36.298 billion dram by cost in the
period. Sales of industrial products totalled 151.908 billion dram in the
quarter. Exports to CIS countries totalled 15.882 billion dram and to non-CIS
countries - 33.241 billion dram.
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TELECOMMUNICATIONS
ArmenTel's sole shareholder becomes Russian VimpelCom
By acquiring 10 percent of ArmenTel shares from the Armenian government for 38.6
million Euro, Russia's leading cellular provider VimpelCom has become the
Armenian company's sole shareholder, it was revealed in a press release,
Interfax News Agency reported.
In addition, VimpelCom will pay an amount representing 10 per cent of the
retained net profit of ArmenTel for the period following the closure of the
acquisition of 90 per cent of the ArmenTel shares and up to the closing of the
acquisition of 10 per cent of the ArmenTel shares from the Armenian government,
the release explained. ArmenTel is a fixed-line and mobile operator in Armenia
with licences in the GSM-900 and CDMA standards. ArmenTel's subscriber base
includes approximately 608,500 fixed-line subscribers and 452,000 mobile
subscribers, the release said. ArmenTel revenue was 27.37 million Euro in the
fourth quarter of 2006, including 10.45 million Euro from mobile services and
16.92 million Euro from fixed-line services. VimpelCom bought 90 percent of the
company's shares last November from Greece's OTE for 341.9 million Euro. It also
took upon itself 40 million Euro in ArmenTel debt.
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